Egypt Changes Central Bank Chief in Fight to Boost Pound

Egypt appointed Hisham Ramez to take
over as governor of a central bank that’s fighting to preserve
public confidence in the pound after it plunged to a record low.

President Mohamed Mursi approved the nomination of Ramez
late yesterday after accepting the resignation of Farouk el- Okdah. The outgoing chief said he had planned for some time to
retire. Ramez will take charge on Feb. 3 and serve until
November 2015 if the appointment is backed by Egypt’s upper
house of parliament.

The pound has slid more than 5 percent in two weeks. The
plunge comes after two years in which the central bank kept the
currency stable through the political instability that followed
the uprising against Hosni Mubarak, spending about 60 percent of
Egypt’s foreign reserves in the period. Seeking to shield its
remaining $15 billion stockpile, the bank introduced daily
dollar auctions last month to cap the amount lenders can buy.

Amir Albeir, a 49-year-old electrician, voices the kind of
concerns about the currency that authorities are seeking to
allay. He says he changed about 220,000 Egyptian pounds
($34,000) to dollars and bought gold worth a similar amount,
making the move after seeing others convert their savings.

“I saw the pound losing its value, and that scared me,”
Albeir said in an interview. “The situation isn’t good, so it’s
very likely that the pound will depreciate even more.” He said
he didn’t deposit the dollars he bought in a bank, and plans to
buy more soon.

The pound dropped to 6.5424 per dollar after yesterday’s
auction, in which the central bank sold $49.1 million.

IMF Delays

The central bank’s role, usually focused on inflation,
“switched to exchange-rate stability” in the period since the
2011 uprising, Said Hirsh, head of economics at Maplecroft, a
U.K.-based risk adviser, said in response to e-mailed questions.
Policy probably won’t change much under Ramez, he said.

Egypt’s economic growth has slowed to an average annual
rate of about 2 percent since the revolt, as tourists and
investors stayed away. HSBC Holdings Plc (HSBA) predicted another year
of similarly sluggish expansion in a report this week, citing
political tensions and delays in a $4.8 billion International
Monetary Fund loan.

The government says a deal with the IMF will help boost
investor confidence and encourage other lenders and donors.
Egypt asked for a delay last month after Mursi suspended tax
increases linked to its IMF-backed economic plan amid political
tensions.

Qatar Support

Egypt has received financial support from Qatar, the
energy-rich Gulf emirate which has ties with Mursi’s Muslim
Brotherhood. Qatar deposited $2 billion in Egypt’s central bank
last month, doubling its total funds there, Nidal Assr, sub-
governor of the bank, said in an e-mail yesterday.

Qatar also said this week it sent a $500 million grant.
Turkey transferred the second half of a $1 billion concessionary
loan, the official Middle East News Agency said yesterday.

Ramez was deputy central bank governor before he resigned
months after the 2011 uprising to become vice president and
managing director of Commercial International Bank Egypt SAE (COMI),
the biggest publicly traded lender. He began his financial
career at Bank of America Corp. in 1982 and has also been a
board member of the Egyptian-American Business Council and the
Arab Monetary Fund, according to the Federation of Egyptian
Banks.

Ramez told reporters yesterday that “the central bank has
all the tools to be able to intervene if we feel there is
speculation” in the foreign-exchange market. “There’s no cause
for worry,” he said. “We can control the matter at any time.”